Gold Price News: Gold Gains As Markets Eye US Fed Moves

Gold prices pushed higher on Thursday, coming within striking distance of their all-time high of $2,532 an ounce seen on August 20^th.

Prices rose as high as $2,529 an ounce on Thursday, compared with around $2,510 an ounce in late trades on Wednesday.

German annual inflation figures were released Thursday showing a drop to 1.9% in August, below market expectations of 2.1%. The latest figures help to justify the ECB’s decision to start cutting interest rates in June – ahead of the Bank of England and US Fed – and may strengthen the case for further cuts by the EU’s central bank, which would contribute to a supportive environment for precious metals.

Meanwhile, the US GDP growth rate for Q2 came in at 3%, according to figures released Thursday, a little above market expectations of 2.8%. Nevertheless, the stronger economic growth figures were not significant enough to alter expectations that the central bank will begin its rate-cutting cycle in September.

Data from interest rate traders suggests about two-thirds of the market expects the US Fed to cut rates by 25 basis points at its September 18^th meeting, while the remaining third expect a cut of 50 basis points, according to the latest data from the CME FedWatch tool: CME FedWatch – CME Group.

Friday will see the release of Euro Area inflation figures for August and the closely-watched US Core PCE Price Index for July – the US Fed’s preferred measure of inflation – for an update that could inform upcoming monetary policy decisions.